Commitment to Reduce Greenhouse Gas Emissions

In 2006, we committed to reduce greenhouse gas (GHG) emissions by 40 percent by 2020 using a 2000 baseline—the most aggressive target in our industry. We will be using more biomass to meet our energy needs in our pulp and paper operations. As a result, by 2020 we expect to:

• Make our pulp mills essentially energy self-sufficient
• Decrease our purchased-energy costs by 50 percent
• Reduce our annual carbon dioxide emissions by 2.8 million metric tons

The result is a win-win for shareholders and sustainability. Shareholders benefit from lower energy costs, and the environment benefits from lower emissions of greenhouse gas. Biomass fuel from sustainably managed forests is considered to have a neutral effect on greenhouse gases in the atmosphere because the regenerating forest absorbs the carbon dioxide released by burning the fuel. Therefore, by deriving the majority of our energy from biomass rather than fossil fuel, we avoid releasing additional carbon dioxide.

The GHG reduction goal follows several initiatives we took in 2006 to manage greenhouse gas emissions. They include:

• Evaluating the greenhouse gas emissions from proposed energy-related investments.
• Improving energy efficiency and productivity by reducing dependence on fossil fuels—for example, by using cogeneration systems and greenhouse-gas-neutral biomass fuels to meet mill energy needs.
• Improving our energy efficiency in our manufacturing processes.